There are several profitable day trading strategies. All of them are more profitable if your technical trading skills are advanced. The sad fact is that most traders and investors sell during a state of panic and buy when they are overly optimistic. Advanced technical trading skills properly applied get you into the market at the most opportune time and out with the maximum profit. A tried and true approach to day trading is with the use of Japanese Candlesticks. This system presents the trader with graphic display of evolving investor sentiment. Using advanced technical trading with Japanese Candlesticks allows a trader to gradually convert long to short positions as an upward trend weakens or short to long positions as the market bottoms out. Advanced technical trading relies on the fact that history simply keeps repeating itself and those who learn the lessons of history need not repeat its mistakes.
Signals That Indicate Market Reversals
There are many truisms in life and there are a lot of truisms in stock trading. Advanced technical trading works to create profits because it allows you to enter and exit trades with the most accurate analysis possible. Traders use technical cues such as moving averages to gain perspective in trading stocks. They use signals such as the Doji from the Japanese Candlestick arsenal to fine tune their decision making. The Doji gives us a good example of how advanced technical trading can lead to profits. This candlestick signal is a relatively flat candle with shadows of varying lengths extending above and below. The candle which looks like a rectangle on the trading chart shows us the opening and closing prices for a given time period, commonly for a day. A white candle tells us that the stock closed higher than its opening price. A black candle tells us that the stock close down for the day. The shadows are lines that extend up and down from the candle and tell us how high and low the stock traded for the day. In the case of the Doji signal the candle is nearly flat which tells us that the opening and closing prices were nearly the same. The shadows may be long or short. This signal is meaningful when it occurs after a stock has been trending up or down for a significant period of time. It tells us that the market has become undecided. And it is a strong predictor of a change in market direction. Paying attention to the Doji in advanced technical trading can lead to handsome profits and help avoid uncomfortable losses.
Following Cues to Profits
There are lots of trading cues. Advanced technical trading involves paying close attention to the cues of market sentiment while keeping market fundamentals firmly in mind. And, advanced technical trading is not trading more frequently. It may, in fact, require you to sit out many trading situations that are not really clear. The point of having an advanced skill set is to use it judiciously and for maximum profits while avoiding unnecessary losses.